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    1. wholesaleinsight's Avatar
      wholesaleinsight is offline

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      #1

      Legitimizing Your Business

      Before getting down to business, be sure you follow all the relevant laws in your area. Looking into the legal issues affiliated with beginning a new business will keep you on a solid foundation and will allow you to center on creating a flourishing enterprise. It's crucial that your business gets on the "up-and-up" right from the beginning. Attending to the legal issues when embarking on a new business will keep you functioning in the future. Here are the opening steps you need to take:

      1.) Determine Your Business Structure

      The simplest business entity to establish is a sole proprietorship. As a sole proprietor you control the business exclusively. You are, in effect, lawfully deemed as one with your business. All assets and earnings belong entirely to you. You are also personally responsible for all debts and legal actions brought against your business. If you're obsessed about possible financial obligations from legal actions, you have the alternative of forming a limited liability company or a corporation.

      A partnership is a type of business entity in which the partners share with one another the profits or losses of the business. Partnerships are often preferred over corporations for taxation purposes, as the partnership structure does not generally incur a tax on profits before it's distributed to the partners. However, depending on the partnership structure and the legal power in which it operates, owners of a partnership might be exposed to larger personal liability than they would as stockholders of a corporation.

      When forming a corporation, potential shareholders exchange money, property, or both, for the corporation's capital stock. A corporation usually takes the same deductions as a sole proprietorship to calculate its taxable income. For federal income tax purposes, a C corporation is recognized as a separate taxpaying entity. A corporation conducts business, earns net income or loss, pays taxes and administers the profits to shareholders. The profit of a corporation is taxed when earned, and then is taxed to the shareholders when allotted as dividends. This creates a double tax. The corporation doesn't get a tax write-off when it distributes dividends to shareholders. Shareholders can't deduct any loss of the corporation. Generally, S Corporations don't pay any income taxes. Alternatively, the corporation's income or losses are divided up among and passed over to its shareholders. The shareholders must then account the income or loss on one's own individual income tax returns. This is called a single taxation.

      A Limited Liability Company is a business structure allowed by state statute. LLCs are very popular since, similar to a corporation, owners have limited financial obligations for the debts and actions of the LLC. Other features of LLCs are more equivalent to a partnership, allowing management flexibility and the benefit of pass-through taxation.
      Owners of an LLC are called members. Since most states in the USA do not restrict ownership, members might include individuals, corporations, other LLCs and foreign entities. There's no peak number of members. Most states also permit single member LLCs, those having only one owner. A couple of businesses generally cannot be LLCs, such as insurance companies and banks. Check with your state’s demands and the federal tax regulations for additional information.

      2.) Register Your Company Name

      Your company name must be registered if it's something other than your legal name. This is a way of informing the general public that you'll be doing business as a fictitious name. In general, a search is executed to guarantee your name isn't already in use, and an application is submitted to make it official. You can look into current use of your preferred business name by looking in your local phonebook and browsing internet listings. The details of registering your company will vary from region to region, so check with your local government office for specific information. You should either give them a ring or check online using their governmental directory. It's also a good idea to check if your business name is already taken by using a state or federal trademark search. You can use the services of the patent and trademark office at Trademarks Home. They provide an online trademark and patent search, and, if sought after, will allow you to even apply for a trademark or patent online. For complete self-assurance that your business name isn't already taken, you may want to look at employing an adequate lawyer specializing in trademark and patent law.

      3.) Certify Your Business

      Certifying your business depends upon the type of business you project to start. Licensing usually occurs at your state/county and/or local level. Federal licensing is only needed for businesses that operate in particular, controlled activities, such as alcohol, making firearms, tobacco, etc. Many nations require a common business license, plus there may be a license demanded for your particular business. You should get hold of some clerk office to check what licenses you need. Only a few businesses are required to obtain an occupational license.

      4.) Getting a Sales Tax Certificate

      Get hold of your state treasury office for info on getting a sales tax certificate. A sales tax certificate obliges you to pay applicable sales tax on trade goods you sell. If your merchandise is to be sold wholesale, or whenever you're buying materials at wholesale, ask about a resale certificate to avert paying taxes twice. Present the sales tax license or reseller's certificate in a common area of the business immediately upon receipt. Record your resale or registration number to have it accessible for wholesale purchasing when you're not at the main location of your business. Your business must have a real address. Post office boxes are not satisfactory.

      5.) Reporting Income Tax

      You are responsible for filing and paying off income taxes for your business. Let's assume your business is a sole proprietorship, so you'll have to pay an income tax on your net profits.

      You must complete the following federal tax forms by April 15 after any year in which you have net earnings of $400 or more:

      - Form 1040 (U.S. Individual Income Tax Return)
      - Schedule C (Profit or Loss from Business)
      - Schedule F (Profit or Loss from Farming)
      - Schedule SE (Self-Employment Tax).

      You will be able to get these forms from the IRS and several banking institutions. Send the tax return and schedules along with your self-employment tax to IRS.

      6.) Follow Zoning Ordinances

      Make sure you check with your city and county offices about any type of zoning ordinances for your business location. A few local governments have specific laws that enforce the harmonious use of property used to bring forth income. You don't want to be in the situation of being forced to close down later because of zoning encroachments.

      7.) Always Acquire Free Advice

      Seeking information about small business administration is a worthy way to acquire more about the nuts and bolts of lawfully operating a small business in your region. By visiting your local city hall, you'll find plenty of answers, if not all of them. Use could also use Google to find your regional office. They will provide a personalized and free consultation to aid you in arriving at the right conclusions for your business.
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    2. Digital Me is offline

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      #2
      This cleared up a few hazy areas in my mind about going legit. THANK YOU!
      How a New Online Retailer Made Over 3 million Sales in 1yr With These Sources

    3. jacob is offline

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      #3
      This is some very solid advice in my opinion, because it applies to both big and small businesses in both major metro. areas as well as rural settings.

    4. juda222000 is offline

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      #4

      Awesome Post

      Thanks so much, I have just joined WF about a month ago and have spent hours a day reading everyone's posts and I finally got to the start up section and this is exactly what I needed thank you!!!!!!!

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